While some think the recession fighters are already out of the woods, others argue that there could be another downturn before there is light at the end of the woods.

This question was pondered by pundits and laymen alike.

More encouraging data

The Commerce Department reported that the US economy expanded3.5 percent in the third quarter after four consecutive quarters of contraction, the strongest signal so far that the worst recession since the 1930s had ended.

In the first two quarters of 2009, the US real GDP (gross domestic product) decreased 6.4 percent and 0.7 percent. In the last two quarters of 2008, the economy contracted 2.7 percent and 5.4 percent.

Data showed that the increase in real GDP in the third quarter of this year reflected a wide range of positive contributions from different economic sectors.

Real personal consumption expenditures increased 3.4 percent in the third quarter, compared with a 0.9 percent decline in the second. Consumer spending on durable goods -- items expected to last more than three years -- soared at an annualized rate of 22.3 percent in the July-September period, the biggest rise since the end of 2001.

Exports of goods and services increased 14.7 percent in the third quarter, in contrast to a decrease of 4.1 percent in the second. The change in real private inventories added 0.94 percentage points to the third-quarter change in real GDP after subtracting 1.42 percentage points from the second-quarter change.

Federal government spending, which rose at a rate of 7.9 percent in the third quarter, also made a significant contribution to the economic turnaround.

The housing market also showed positive signs during the summer. Spending on housing projects surged at an annualized pace of 23.4 percent, the largest jump since 1986.

"After four consecutive quarters of decline, positive GDP growth is an encouraging sign that the US economy is moving in the right direction," the White House said Thursday in a statement.

Yet cautiously optimistic

Yet even the government was cautiously optimistic when it admitted that the GDP figure represented only part of the story.

"This welcome milestone (growth in the third quarter) is just another step, and we still have a long road to travel until the economy is fully recovered," the White House said in the statement.

"Unemployment remains unacceptably high for every person out of work, for every family facing foreclosure, for every small business facing a credit crunch," Treasury Secretary Timothy Geithner observed. "The recession remains alive and acute."

In response to the GDP data, US President Barack Obama said that "while this report today represents real progress, the benchmark I use to measure the strength of our economy is not just whether our GDP is growing, but whether we are creating jobs, whether families are having an easier time paying their bills, whether our businesses are hiring and doing well."

Obama's concerns were echoed by many economists, who worried that the economy might still lose its strength since the recovery was mainly driven by the government's stimulus package and might not be sustainable when the stimulus policies fell off.

The Obama administration launched a US$787 billion stimulus package in February. But some of the policies have already expired or will expire soon.

After the Cash-for-Clunkers program came to an end in August, US auto sales fell sharply.

New home sales also decreased at an unexpectedly high annual rate of 3.6 percent in September as the government-supported 8,000-dollar tax credit program for first-time home buyers will expire on November 30.

Home builders have started to worry that they would have trouble selling their homes without the incentive.